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Rueling v. MOBIT LLC

United States District Court, D. Arizona

June 28, 2018

Kristina Rueling, Plaintiff,
MOBIT LLC, et al., Defendants.



         Defendants, MOBIT, LLC and James Koch, have filed a motion to dismiss for lack of subject matter jurisdiction, pursuant to Rules 12(b)(1) and 12(h)(3) of the Federal Rules of Civil Procedure. (Doc. 10.) The motion is fully briefed. (Docs. 11, 18.) As set forth below, the Court grants Defendants' motion.

         I. Background

         In this matter, Plaintiff Kristina Rueling asserts claims for failure to pay minimum wages under the Federal Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, and failure to make timely payment of wages under the Arizona Wage Act, Ariz. Rev. Stat. §§ 23-351, 23-353, and 23-355. (Doc. 1.) Plaintiff alleges that Defendant MOBIT LLC is a mobile marketing company, Defendant James Koch is the owner of MOBIT LLC, and that she was a sales representative and full-time employee of these Defendants from August 2017 until November 2017. (Id. at ¶¶ 8-11, 17-19.)

         On November 20, 2017, Plaintiff provided a one-week notice that she would be resigning. (Id. at ¶ 19.) Plaintiff alleges that she was terminated that same day and that Defendants did not pay her final paycheck for work she performed between November 1, 2017 and November 20, 2017. (Id. at ¶¶ 19-20.) Plaintiff estimates that her final paycheck should have been “around $5, 000.” (Id. at ¶ 20.) Plaintiff alleges that she requested her paycheck several times. (Id. at ¶ 21.) Plaintiff seeks unpaid minimum wage compensation, liquidated damages, and statutory penalties for Defendants' alleged violations of the FLSA. (Id. at ¶ 2.) Plaintiff seeks unpaid wages, treble damages, and statutory penalties for Defendants' alleged violations of the Arizona Wage Act. (Id. at ¶ 3.)

         In their motion to dismiss, Defendants assert that MOBIT LLC is a Delaware-based company that has no employees and no contractors. (Doc. 10, Ex. 2.) Defendants assert that MOBIT LLC never had a contract with Plaintiff. (Id. at 2, n.2; Ex. 1 at ¶¶ 3-5.) Defendants further assert that Plaintiff was a contractor with a New Zealand-based company called MOBIT Technologies Ltd.[1] (Id., Ex. 1 at ¶¶ 2-3.) In response to the motion to dismiss, Plaintiff refers to “MOBIT” and does specify whether she is referring to Defendant MOBIT LCC, or MOBIT Technologies Ltd, an entity that has not been named as a defendant in this matter.[2] (See Doc. 11.) Plaintiff states that on December 12, 2017, and again on February 6, 2018, “MOBIT” asked Plaintiff to release her claims in exchange for $5, 000 and she rejected these offers. (Id. at 2-3.)

         On March 15, 2018, MOBIT Technologies Ltd. wired $5, 000 to Plaintiff's bank account. (Doc. 10 at 2; see also Doc. 11 at 3, Ex. 3 at ¶ 5 (Plaintiff acknowledges the wire transfer, but states it was from “MOBIT” and does not specify whether the funds were from MOBIT LLC or MOBIT Technologies Ltd.).) Defendants state that this amount addresses the wages allegedly owed to Plaintiff under her contract through November 20, 2017, plus an additional sum. (Doc. 10, Ex. 1 at ¶ 8.) Plaintiff's bank charged her $20.00 for the transaction. (Doc. 11, Ex. 3.) Plaintiff asserts that she “rejected the tendered offer of settlement.” (Id., Ex. 6.) Defendants' counsel notified Plaintiff's counsel that MOBIT Technologies Ltd. had paid Plaintiff in full and asked that Plaintiff dismiss the case. (Doc. 10, Ex. 3 at ¶ 3.) Plaintiff refused to do so. (Id.) Defendants filed the pending motion to dismiss on the ground that Plaintiff's FLSA claim is moot and, therefore, the Court lacks jurisdiction over this matter.

         II. Standard of Review

         A party seeking to invoke the jurisdiction of the federal courts must establish “standing” under Article III of the United States Constitution. Schmier v. U.S. Court of Appeals for Ninth Circuit, 279 F.3d 817, 820-21 (9th Cir. 2002). “The ‘core' or ‘bedrock' elements of standing” are “a (1) legally recognized injury, (2) caused by the named defendant that is (3) capable of legal or equitable redress.” Id. If a party lacks standing, she may not bring her suit in federal court. Id.

         A party must maintain a live controversy throughout the litigation. Di Giorgio v. Lee, 134 F.3d 971, 974 (9th Cir. 1998). If an action or claim no longer presents a live controversy, the action or claim becomes moot and the court lacks jurisdiction to resolve the underlying dispute. See Ruiz v. City of Santa Maria, 160 F.3d 543, 549 (9th Cir. 1998) (“Generally, an action is moot when the issues presented are no longer ‘live' or the parties lack a legally cognizable interest in the outcome.”) (citation and internal quotation marks omitted). Mootness is a sometimes referred to as “the doctrine of standing set in a time frame.” U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 397 (1980). “A case becomes moot when interim relief or events deprived the court of the ability to redress the party's injuries.” Am. Cas. Co. of Reading, Penn. v. Baker, 22 F.3d 880, 896 (9th Cir. 1994). When a case becomes moot, the party loses standing, the court loses jurisdiction, and the matter must be dismissed. Doe v. Madison School Dist. No. 321, 177 F.3d 789, 797-98 (9th Cir. 1999).

         III. Plaintiff's FLSA Claim is Moot

         Under the FLSA, employers must pay the federal minimum wage, at the rate set by statute, to an employee “who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce.” See 29 U.S.C. § 206(a). Since July 24, 2009, the federal minimum wage has been $7.25 per hour and, therefore, this is the rate that applies to Plaintiff's minimum wage claim for hours worked in November 2017. See 29 U.S.C. § 206(a)(1). Plaintiff, as “[a]n employee seeking to recover unpaid minimum wages or overtime under the FLSA ‘has the burden of proving that [s]he performed work for which [s]he was not properly compensated.'” Brock v. Seto, 790 F.2d 1446, 1447-48 (9th Cir. 1986) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)).

         In Count I of the Complaint, Plaintiff alleges that Defendants violated the FLSA by failing to pay her the minimum wage for work performed between November 1 and 20, 2017.[3] (Doc. 1 at ¶¶ 20, 33-41); see 29 U.S.C. § 206. Plaintiff does not allege that she worked overtime. (Doc. 1 at ¶¶ 20, 33-41.) Thus, Plaintiff claims that she was not paid minimum wage for a maximum of three weeks in which she worked 40 hours per week. Plaintiff's damages for Defendants' alleged failure to pay the federal minimum wage amount to $870 ($7.25 x 120 hours) plus liquidated damages, for a total of $1, 740 See 29 U.S.C. § 216(b).[4] The $5, 000 that MOBIT Technologies Ltd. wired to Plaintiff's bank account, less $20 for the transaction fee, exceeds $1, 740 and, therefore, exceeds the damages that Plaintiff can recover on her FLSA claim. See id. Accordingly, Plaintiff's FLSA claim is moot. See Kouba v. Renzenberger, Inc., 2012 WL 7149410, at *2 (D. Ariz. Jul. 6, 2012) (plaintiff's claim for unpaid wages FLSA was moot because defendant tendered to plaintiff the maximum amount of damages plaintiff could collect), report and recommendation adopted by 2013 WL 593458 (D. Ariz. Feb. 7, 2013); Orozco v. Borenstein, 2012 WL 3762408, at *2-*3 (D. Ariz. Aug. 29, 2012) (FLSA claims were moot because defendant had reimbursed minimum wage employees for the fees deducted from their paychecks and paid liquidated damages); Evans v. Gen. Mech. Corp., 2012 WL 1450107, at *1 (M.D. Fla. 2012) (“FLSA claims are frequently mooted when an employer/defendant tenders ‘full payment.'”).

         In Kouba and Orozco, courts in this district dismissed plaintiffs' FLSA claims after defendants tendered payment for the plaintiffs' full damages. In Kouba, plaintiff alleged that his employer violated the FLSA by failure to pay overtime wages. Kouba, 2012 WL 7149410, at *1. After plaintiff filed suit, defendant tendered plaintiff one check for the overtime wages and a separate check for the statutory damages and interest. Id. Plaintiff cashed the larger check because he believed it was an admission of wrongdoing by defendant, but did not cash the smaller check because he did not want to give up his right to a jury trial. Id. ...

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